Protecting Our Diversity

In reaction to the recent U.S. offensive against EU regulations, French filmmakers have published an open letter to their American colleagues. In the letter, France’s two main film organisations, the ARP (Society of Authors, Directors and Producers) and SRF (Society of French Film Directors) voice their dissent and invite American filmmakers to re-engage in a constructive dialogue. The European Film Academy fully supports this initiative of our French colleagues, both in defending the European regulations that protect the diversity of our films, and in remaining open for further exchange and dialogue.

Honorable Members of the DGA,

Dear Colleagues,

We read with great interest and some astonishment your letter to the United States Trade Representative. We felt it was important to address some of your concerns and to reengage in a constructive dialogue about our respective sectors.

As a matter of facts, a film and audiovisual policy exists in France, within the European Union, and in many countries around the world. Regarding France, it is thanks to our model and its regulations that our market is so dynamic. Our proactive cultural policy has enabled us to become the country with the highest number of movie theaters in Europe, and to attract a significant number of moviegoers. Yet this regulation is highly beneficial to American films, which account for an average of 45% of our box- ffice, and for which France remains one of the leading markets. Our regulation also supports independent American cinema, which very often finds its audience in France and which we will always gladly welcome.

Thus, the good health of national markets is a sine qua non condition for maintaining a dynamic market, not only in terms of audience but also in terms of infrastructure, and ultimately in terms of box office revenue, TV and SVOD viewership, and so on, which benefits non-national works, American ones included. We are convinced that our model safeguards not only French creation but creation from all over the world. To give you a concrete example: thanks to France’s cultural policy and to taxes collected from all operators broadcasting films (both French and foreign), we have a youth education program about films, nurturing today’s and tomorrow’s large audience of moviegoers, and we can fund a wide range of actions promoting films creation and distribution.

Our Film Admission Tax is a contribution collected on every ticket sold in French movie theaters. Established in 1948, in the post Second World War context of cultural and economic reconstruction, its purpose is to support the national film industry through its redistribution mechanism. This earmarked tax system is relatively rare and is considered as a model in Europe for supporting cultural diversity. While it primarily benefits French films, international productions (including American ones) can also receive support under certain conditions like co-producing with a French company, hiring French technicians or artists, and meeting language, shooting, or local expenses quotas. Films like Midnight in Paris by Woody Allen or Inglourious Basterds by Quentin Tarantino have therefore received support from the CNC.

We create a more dynamic market, we achieve greater overall revenue thanks to our high number of spectators, which makes the tax highly profitable. As a result, France’s total gross is often higher than in countries with lower taxes, but fewer tickets sold.

We are also quite surprised that such policies could be considered as “unfair trade practices,” especially since the United States are themselves very familiar with protectionist policies: as early as 1918, the Webb-Pomerene Act created an exception to antitrust laws for exports, in other words allowed cartels to form provided that they operated outside the borders of the United States, thus enabling entertainment giants to reach a commercial agreement to jointly manage the broadcast of their films abroad, up until 2004. In 1946, the U.S. government agreed to cancel European debts in exchange for the removal of quotas on French films in French movie theaters. And as recently as 2006, South Korea agreed to reduce its screen quota under a trade deal with the United States.

You express concerns about the relocation of film shoots due, for example, to tax credits or obligations to invest in creation. First, it is important to note that our regulations are non-discriminatory, since investment and broadcasting obligations have historically concerned local broadcasters and now apply to all players operating in France and Europe, whatever their nationality. Moreover, strategies adopted by studios and platforms to relocate film shoots predate the introduction of obligations. This can be explained by tax credits, a practice implemented in all filmmaking countries with no exception: many states in the United States are proof of this. Lower production costs abroad are another factor, as seen in Canada, where many American films have been shot for the past twenty years. It also results from the industrial strategy of certain streamers to address local audiences with local content, in the local language, to expand their market share in each country.

More than half of MPA member companies’ revenues is generated outside the United States, clear evidence that these companies have a strong ability to expand their reach on international consumers.

Of course, we regret the decrease in production in the United States since 2022. We believe it would be incorrect to attribute this solely to foreign taxes or legislative policies: Hollywood strikes, studio decisions to move productions abroad, majors opting to scale back investments, inflationary environment, and a global post-Covid market contraction may also explain this decline. Our policies should not serve as scapegoats for these strategic and industrial decisions, nor for the decline of the United States’ production.

At a time when the gap between the United States and the rest of the world is widening, we believe it is more important than ever that we, European and American filmmakers, remain united and supportive, continuing to foster mutually beneficial exchanges in our respective sectors for economic, political, and cultural reasons.

Since the early days of cinema, filmmakers on both sides of the Atlantic have admired, inspired, and collaborated continuously, driven by the same passion. We also share many common battles, for better recognition and appreciation of our professions, to ensure that AI, which is playing a growing role in our industry, respects copyright, and that the territoriality of rights in Europe continues to be a source of better distribution and circulation of works, and therefore of better revenue for your members and ours.

You mention in your letter a “global exchange of free speech”: we are deeply committed to protecting independence of creation and freedom of expression, values our model upholds, to ensure we remain a land of refuge and creation for stories in all their diversity. We propose organizing a meeting between our organizations to pursue this discussion and build a united front. The Cannes Film Festival could be a great opportunity to exchange views on these matters together.

Please accept, dear colleagues, our warmest regards,

ARP and SRF Filmmakers Among our members: Costa-Gavras, Claude Lelouch, Jacques Audiard, Cedric Klapisch, Euzhan Palcy, Radu Mihaileanu, Audrey Diwan, Stephane Demoustier, Zoe Wittock, and others.